Avocats chez Davis S.E.N.C.R.L.

Canada - U.S. Clean Energy Dialogue: Governments of Canada and the United States take another step to develop clean energy technology

On April 16, 2010, Canada's Minister of Natural Resources, the Honourable Christian Paradis and his American counterpart, Steven Chu, U.S. Secretary of Energy, signed a Declaration of Intent ("DOI") for Cooperation in Energy Science and Technology.

The DOI, which was highlighted under the Canada-U.S. Clean Energy Dialogue Action Plan put forth by Prime Minister Stephen Harper and President Barack Obama in September 2009, provides a formal structure for collaborative activities between the two countries and is initially to focus on expanded research and development in bioenergy and carbon capture and storage. The DOI was signed following the Energy and Climate Partnership of the Americas, where ministers from countries in North and South America gathered to discuss strengthening energy security, promoting alternative energy resources and acting together to address the effects of global climate change.

The DOI is to benefit a number of collaborative projects between Canada and the U.S., such as: a cooperative research and development agreement to investigate the productivity and harvesting of algae and its ability to produce biofuels; the North American Carbon Atlas Project, which is developing an atlas of major CO2 sources, potential CO2 storage reservoirs and storage estimates in Canada, the U.S. and Mexico, based on common methodologies; and R&D on new coal gasification technology to reduce emissions from the production of coal.

The activities under the DOI are being led by the Clean Energy Research and Development Working Group and the Clean Energy Technology Working Group. Along with the Electricity Grid Working Group, a number of other activities are also being undertaken for the Clean Energy Dialogue:

Clean Energy Technology Working Group

The group is seeking to advance the development and deployment of carbon capture and storage ("CCS") in Canada and the U.S. Initial efforts have focused on implementing the following Clean Energy Dialogue Action Plan commitments:

• Next-generation Technologies: the U.S. and Canada are enhancing links between CCS researchers in order to further next-generation CCS technologies by sharing information and collaborating on projects.
• CO2 Injection and Storage Testing: the U.S. and Canada are developing and demonstrating CO2 measuring, monitoring and verification methods to confirm the safety and efficacy of CO2 storage.
• Collaboration on Large-scale CCS Demonstration Projects: the U.S. and Canada are sharing best practices and lessons learned from large-scale CCS demonstration projects.
• Strategies for Public Engagement: the U.S. and Canada are strengthening their partnership in this area by engaging federal and state/provincial governments, as well as industry, universities and other non-government entities, while also effectively communicating with the public on CCS.
• Working Toward Compatible Rules, Standards and Practices: the U.S. and Canada are working toward developing compatible CCS regulations to minimize business barriers and facilitate possible future cross-border CCS projects.
• Bilateral National Conference: An annual U.S. - Canada CCS conference has been established to further this dialogue and to facilitate CCS-based activities on an ongoing basis. The first conference will be held May 10, 2010, in Pittsburg, Pennsylvania.

Clean Energy Research and Development Working Group

This group aims to connect Canadian and U.S. experts and improve collaboration in priority areas such as future-generation biofuels, clean engines/vehicles and energy efficiency (homes and buildings). Pursuing joint research, development and deployment (RD&D) in these areas will enable significant greenhouse gas reductions while strengthening North American economic performance and creating green employment.

Initial efforts have focused on implementing the following Clean Energy Dialogue Action Plan commitments:

• Clean Energy RD&D Collaboration Framework: In order to expand collaboration, the U.S. and Canada are developing a framework to provide mechanisms and resources for expanded joint R&D collaboration.
• Clean Energy RD&D Roadmap: The U.S. and Canada are creating a joint roadmap to identify technology and associated research, development and deployment pathways that would help reduce greenhouse gas emissions by 2050.
• Immediate Collaborative Projects and Initiatives: Projects and initiatives that have been launched include:
• Analyzing the economic feasibility of different methods for converting trees killed by the mountain pine beetle into biofuels.
• Facilitating the integration of buildings into the smart grid through the identification of requirements and the development of standards and tools to evaluate and control the energy demand of buildings.
• Expanding ENERGY STAR criteria and programs with the development of new and revised specifications for product categories.
• Signing partnership agreements to improve energy efficiency in the transportation sector by coordinating research and development of lightweight materials development.

Electricity Grid Working Group

The group is focused on Canada-U.S. collaboration to facilitate the long-term transition to a modernized electricity system. This collaboration includes the identification of options for increasing Canada-U.S. trade in clean electricity, including the role that energy storage technologies might play in helping to accommodate increased penetration of renewable sources in that trade. It also includes the sharing of best practices and engaging industry and stakeholders in the increased application of communications technologies, sensors and computer software to the electrical system, or what is known as the "Smart Grid."

Initial efforts have focused on implementing the following Clean Energy Dialogue Action Plan commitments:

• Increasing Opportunities for Trade in Clean Electricity: Natural Resources Canada and the U.S. Department of Energy are working with industry and other levels of government to identify potential resources and markets for increased clean electricity and ancillary services trade.
• Advancing Smart Grid and Clean Power Technologies: Both governments are working together and sharing government-sponsored electricity research, development and deployment as well as government- and industry-sponsored reliability standards, cyber security and joint system guidelines.
• Realizing the Potential of Power Storage: Both governments are engaging industry and other levels of government to improve understanding of the existing storage
• Building the Power Workforce of Tomorrow: Conference was held in Toronto in February 2010 to work with industry and educational institutions to identify the additional skills necessary to meet future labour requirements associated with modernizing and building a more efficient electricity grid.

Canada-U.S. Electricity Grid/ Smart Grid Forum: The U.S. and Canada have committed to host a regular Canada-U.S. Smart Grid Forum, which will serve to assess progress toward a more efficient electricity grid based on clean and renewable generation while identifying new priorities.

Joint Announcement of an Investment of up to $20 million to develop a Pilot Biorefinery in Thunder Bay

Today, the Honourable Tony Clement, Federal Minister of Industry, on behalf of the Honourable Lisa Raitt, Canada's Minister of Natural Resources, along with the Honourable Michael Gravelle, Ontario Minister of Northern Development, Mines, and Forestry, announced funding of up to $20 million to develop a forest biorefinery. The pilot project will test forest biomass for use in energy and next-generation forest products. The initial phase of the pilot project involves a feasibility study that will provide a complete analysis of the biorefinery's functions, including a pre-commercial process to extract wood fibres; identify market opportunities; assess output capacity of the demonstration plant; and determine full project costs.

An agreement was also reached by all partners to increase the research capacity and knowledge in the region, which will help Thunder Bay's reputation as a leading centre for bioeconomy research and innovation.

Of the project and agreement, Minister Gravelle was quoted as saying "The diversification of the forest industry in Ontario, including emerging innovative biofuel, is key to strengthening Ontario's forest sector now and into the future [...] we created the Centre for Research and Innovation in the Bio-Economy to bring business, government and communities together to develop new economic opportunities and help ensure a bright future for Northern Ontarians."

Located in Thunder Bay, the Centre for Research and Innovation in the Bio-Economy, or CRIBE, is a not-for-profit organization developed by the Ontario Ministry of Research and Innovation, which focuses on commercializing new forest products and technologies by working with leading researchers and industry. The province is currently investing $25 million in the CRIBE, which intends to attract world-class researchers and industry leaders to develop the next generation of renewable forestry bio-products.

Forest bio-products contribute an estimated $1 billion to Canada's economy and could one day be as important as the conventional forest economy.

International Energy Agency launches World Energy Outlook 2009 in London

The International Energy Agency>International Energy Agency ("IEA") today launched its annual flagship publication in London. The World Energy Outlook 2009 (WEO 2009) looks at the impact of the economic downturn on energy use, CO2 emissions and energy investment and what will be required at the UN climate conference in Copenhagen to put together an agreement that stops global temperatures rising at a price that is affordable. The WEO 2009 also focuses on the natural gas resource base, current trends and the role gas will play in the future energy mix. Finally, the publication includes a review of energy in Southeast Asia, looking at that fast-growing region and its implications for global energy markets.

The IEA's Executive Director, Mr. Nobuo Tanaka declared that "World leaders gathering in Copenhagen next month for the UN Climate summit have a historic opportunity to avert the worst effects of climate change. The World Energy Outlook 2009 seeks to add momentum to their negotiations at this crucial stage by detailing the practical steps needed for a sustainable energy future as part of a global climate deal" and added that "WEO 2009 provides both a caution and grounds for optimism. Caution, because a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security. Optimism, because there are cost-effective solutions to avoid severe climate change while also enhancing energy security - and these are within reach as the new Outlook shows".

In conjunction with the WEO 2009, the IEA has also released an Executive Summary which provides an overview of the publication's key findings and topics, as well as a Fact Sheet, which provides data in a bullet-point format on the following questions and issues: (1) The sustainability of our current energy pathway; (2) The Impact of the financial crisis on Energy Investment (3) Natural gas' role in the global energy mix; (4) What a low-carbon energy future might look like; (5) The impact of the financial crisis on the outlook for CO2 emissions and global climate; (6) Assumptions on Energy Prices, volatility and the future of cheap energy.

Copies of the World Energy Outlook 2009 can be ordered from the IEA Bookshop.

BC's Northwest Transmission Line Project to receive up to $130 million under the Green Infrastructure Fund

Almost one year ago, British Columbia Premier Gordon Campbell announced that the Province would start the environmental assessment process and First Nations consultation on the Northwest Transmission Line, which consists of a 287 kV line which would extend 335 kilometres into the Northwest portion of the province from Terrace to Meziadin Junction and north to Bob Quinn Lake.

The estimated $404 million project which is expected to be ready for construction in early 2010 has been given a serious boost as a result of yesterday's announcement by the federal government that it has been selected as a priority for funding of up to $130 million under the Green Infrastructure Fund, conditional upon the signing of a contribution agreement with the British Columbia government under the fund.

The Northwest Transmission Line will provide multiple benefits:

As the area surrounding the project has a significant potential to generate green power, local communities will be able to access clean electricity in the future, reducing their reliance on diesel generation and resulting greenhouse gas emissions. There is currently an estimated 2,000 MW of renewable energy in the area from small hydro, geothermal, wind and biomass sources and the project could immediately serve a number of potential generation projects representing approximately 500 MW being considered under British Columbia's current Clean Power Call.

The project also provides access to the electricity grid for potential customers, which in turn will support and promote economic diversification in the area. According to the Mining Association of BC, the project has the potential to attract $15 billion in new capital investments and create almost 11,000 jobs.

Lastly, construction of the transmission line will be a key step in a potential interconnection between southeast Alaska and the North American transmission grid via British Columbia.

Nova Scotia Power to cut emissions by 10% by 2020

Nova Scotia has committed to trimming emissions from its electricity sector by 10% by 2020. Recently passed regulations impose a declining cap on facilities that emit more than 10,000 tonnes of carbon dioxide equivalent per year.

Only Nova Scotia Power will be caught by the regulations. Its generating stations currently emit about 10 million tCO2e per year, the bulk of which are from its four coal-fired plants.

Nova Scotia Power is already looking for ways to cut its emissions. Like OPG in Ontario, it is test-firing coal plants with blends of coal and biomass. It recently issued a Request for Expressions of Interest to supply biomass to those plants in the future. The deadline for responding is August 28.

Davis Helps Bring Bioenergy to BC's Power Grid

Davis client, Canfor Pulp Limited Partnership, was one of four biomass projects chosen by BC Hydro to add electricity to BC's power grid. The four projects will burn wood waste to generate year-round electricity, providing carbon neutral fuel for 52, 000 homes. Canfor is expected to begin contributing power to the province soon. Davis lawyers Brian Hiebert and Will Todd acted for Canfor.

To read the Vancouver Sun article on this subject, please click here.

BC Hydro Stakeholder Session - Bioenergy Call for Power Phase II - Community Based Biomass Projects RFQ (CBB)

On Tuesday July 14, 2009 BC Hydro held an introductory stakeholder session pertaining to the Bioenergy Call for Power Phase II - Community Based Biomass Projects (CBB) Request for Qualifications (RFQ). More information on this CBB RFQ can be found on the BC Hydro website.

Through this RFQ, BC Hydro is looking to source power from community-based biomass projects no larger than 5 Mw. The biomass can be any form of biomass that meets BC Clean or Renewable Electricity definitions.

Regarding Timing for the RFQ, the deadline for submissions of proposals is currently set for November 2009, with the RFQ process complete in early 2010. BC Hydro seeks to qualify at least two projects to engage in negotiations after this RFQ process is complete, which may result in Electricity Purchase Agreements being awarded with respect to the qualified proposals.

Feedback on this RFQ can be submitted through the BC Hydro website by filling out and submitting the Draft RFQ Comment Form, and this opportunity is open until July 31, 2009.

Evaluation Criteria is based on: 1) economic viability; 2) development risk; 3) Distribution-system benefits (addressing reliability issues); 4) community benefits; 5) First Nations involvement; and 6) innovation (unproven or near-commercial technology is not excluded). James Grant, the project manager for the CBB commented that these carried equal weight, and that not all were needed but having them all would make a proposal submission stronger.

For development risk, BC Hydro would consider fuel availability for the length of the contract, adverse impacts and community and First Nations engagement and support. Mr. Grant stressed the importance of having the community "onside", and having a First Nations consultation plan. However, some IPP and First Nations attendees questioned the fast approaching time deadlines of the RFQ, the vagueness of it as it is currently drafted (including what constitutes First Nations consultation, and on price signals), and whether it met today's competitive procurement environment.

Other attendees questioned why this was not an ongoing process, while many questioned BC Hydro on "environmental attributes'. Mr. Grant commented that there is some flexibility there in terms of ownership of environmental attributes, but stated that "we want those", and proposed that attendees should submit feedback on this point, and all other points raised through the comment form.

Overall it appeared that many in attendance were not satisfied that this RFQ would lead to competitive opportunities, particularly in light of the upper project size limit of 5 Mw and the fact that BC Hydro foresees only selecting a small number of proposals for bi-lateral negotiations.

CD Howe Institute questions cost effectiveness of biofuels subsidies

The CD Howe Institute recently released "Going Green for Less: Cost-Effective Alternative Energy Sources", a comparative analysis of federal and provincial greenhouse gas ("GHG") mitigation incentive programs (the "Report"). The Report concludes that the government is currently over-investing expensive liquid bio-fuels programs and is under-investing in most cost-effective programs renewable heat and power programs.

The Report analyzes programs for liquid biofuels, renewable power, and renewable heat. The life-cycle emissions mitigation potential of each is measured against the technology that they would most likely replace (e.g., emissions from bio-diesel were compared against those from conventional diesel). The financial incentive for each program is then normalized using the calculated emissions mitigation potential to give a dollar-per-tonne measure of cost effectiveness. The Report acknowledges that the calculations are subject to many assumptions.

The Report summarizes the results as follows:

"The lowest-cost government incentive programs identified are for renewable heat and power technologies such as wind power, solar air and hot water heating, and biomass pellet heating, as well as energy retrofitting strategies. For these programs, mitigation could be realized at $10-to-$60 of government subsidy per tonne of carbon dioxide equivalent (CO2e) offset.

In contrast, the most expensive government incentives were found to be liquid biofuels, which ranged from $295-to-$430/tonne of CO2e for ethanol and $122-to-$175/tonne of CO2e for biodiesel. The federal government's $4.5 billion ecoENERGY program has dedicated over half of the total budget towards liquid biofuels." [emphasis added]

Having concluded that the government has a tendency to place big bets on the wrong technology, the Report recommends a technology-neutral alternative to existing programs. It suggests setting a carbon emissions "bounty" of between $30-50 per tonne CO2e, payable to any technology that could demonstrate verifiable reductions. However, the Report acknowledges that universal price on carbon, such as that established by a carbon tax or cap-and-trade system, would be preferrable to an improved carbon subsidy.

BC Hydro announces Phase 2 Bioenergy Call for Power

On March 5, 2009, BC Hydro launched the second phase of its Bioenergy Call for Power. BC Hydro revealed that there will be two streams to the Phase 2 call:

"The first stream is a competitive call for larger-scale biomass projects. Any form of biomass will be eligible and it will include wood waste sourced from new forest tenure enabled through provincial legislation in May 2008. The target is to acquire 1,000 gigawatt-hours per year of energy through this stream.

The second stream will focus on innovative, community-level electricity supply solutions using biomass. Through a request for qualifications, BC Hydro will seek to identify at least two such projects that can provide cost-effective electricity for ratepayers, as well as other quantifiable, local benefits such as improved reliability."

Read the full press release here. See BC Hydro's Bioenergy Call for Power homepage for updates.

Interested bidders may want to check out BC Hydro's report on the Phase 1 call, which it recently filed in its LTAP proceeding before the BC Utilities Commission.

Green energy is the next hot intellectual property sector

As reported in the March issue of Lawyers Weekly, patent filing is a booming area of practice for many Canadian firms. In particular, Davis LLP lawyer Ken Cancellara predicts that there will be a rush to protect intellectual property in the alternative energy sector:

"The Internet isn't the only reason for the increased legal business related to patents. The market 'is stable as far as general industries are concerned, but it's growing and about to explode in another area,' noted Kenneth Cancellara, a partner with Davis LLP in Toronto.That explosion is being felt in the energy sector, and it is especially pronounced in the alternative energy field. 'You can't pick up a newspaper today without reading about biofuels,' said Cancellara.

'If I had a prediction to make,' he added, 'it will be that this area is as important as the pharmaceutical [sector] issues in the 1980s. In the next two to five years, protection of alternative energy sources will become absolutely essential to the survival of the sector.'"

The full text of the article is available here.

OEB to allow small-scale renewable projects to jump the distribution connection queue

Effective February 12, 2009, the Ontario Energy Board ("OEB") amended its Distribution System Code ("DSC") to make it easier for small-scale generation projects to connect to the grid. By default, projects that wish to be connected to a distribution system are considered on a "first come first served" basis. The amendments to the DSC exempt certain projects from the default process, allowing them to jump the queue.

Under the previous version of the DSC, "micro-embedded generation projects", defined as embedded generation facilities with a name-plate rated capacity of 10 kW or less, were exempt fron the queuing process. The amendments preserve the exemption for micro-embedded generation projects and extend it to apply also to "queue exempt small embedded generation facilities", which include the following: any embedded generation facility which is not a micro-embedded generation facility and which has a name-plate rated capacity of 250 kW or less in the case of a facility connected to a less than 15 kV line and 500 kW or less in the case of a facility connected to a 15 kV or greater line.

The expanded exemption applies retroactively to projects already in the connection queue. However, distributors retain the discretion to reject applications where the proposed project may adversely impact a larger generation project already in the queue. Such rejections must be put to the OEB for consideration. A detailed discussion of the amendments, and the discussions leading up to them, is available from the OEB.

In its press release, the OEB justified the amendments as follows: "These changes will support the development of smaller, local generation by allowing pending projects to move forward immediately, and by simplifying the process to connect new smaller generation projects."

The Green Energy Act, to be unveiling next week, may further simplify the process by requiring distributors to connect renewable power projects. The Green Energy Act Alliance (see our related posting ) has been advocating for a "right to connect." We should know by Monday whether such a right is part of Minister Smitherman's bill.

OPG seeks expressions of interest to supply biomass to coal plants

Will the mountains of coal at Nanticoke Generating Station one day be replaced by mountains of switchgrass pellets? Ontario Power Generation is taking further steps to answer that question. OPG had already run some pilot projects in which it co-fired biomass with coal in several of its generating stations. It now wants to assess the commercial feasibility of a large scale switch to biomass.

To that end, OPG has issued a request for expressions of interest (RFEI) for the supply of biomass to Ontario's coal-fired generating facilities. OPG is seeking pricing information regarding the entire solid biomass fuel supply chain, including fuel production, loading/storage, quality control, road/rail/ship transportation, rail equipment, and lakeport terminal services. Interested parties must confirm their participation by February 3, 2009. Responses are due at 3:00 pm on February 26, 2009.

For more background on the announcement, see Tyler Hamilton's article in the Toronto Star.

IESO: Ontario still on track to phase out coal

"Ontario is well positioned for the phase-out of coal-fired generation by the end of 2014," concluded the Independent Electricity System Operator (IESO) as part of its most recent Ontario Reliability Outlook, released December 22, 2008. OPG is obliged to wean itself off coal by 2014 by Regulation 496/07, which will prohibit the use of coal to fire the Atikokan, Lambton, Nanticoke, and Thunder Bay Generating Stations after December 31, 2008.

The IESO is confident that 10,000 MW of new or planned generation and demand management will be sufficient to support the elimination of coal-fired generation in Ontario. However, the IESO also concludes that Ontario must transform the way it operates its electricity grid and must make significant improvements to transmission infrastructure if the phasing out of coal (and phasing in of renewables) is to be a success.

Before the 2014 deadline, OPG must mitigate the greenhouse gas emissions of its coal-fired generating stations. Last May, the Ministry of Energy imposed greenhouse gas emission targets on OPG (through a Ministerial Directive that was approved by the Ontario Energy Board and two shareholder resolutions passed by the Minister). Emissions from coal-fired generation may not exceed 19.6 Mt CO2e in the 2009 calendar year and 15.6 Mt in 2010.

On November 28, 2008, OPG delivered to the Ministry a strategy for meeting the targets. The strategy has four prongs:

• OPG will designate certain planned outages as CO2 outages. If the IESO needs to dispatch the units during designated CO2 outages, the emissions released as a result will not count towards the targets;
• OPG will manage the operation of the units to minimize wasteful emissions. OPG will designate certain units as Not Offered But Available ("NOBA") for parts of the year. NOBA units will not be started unless a coal-fired unit is forced out of service or the IESO directs the NOBA unit to operate;
• OPG will apply an "emission adder" to the price of coal-fired power. The emission adder is an additional premium per tonne of emissions that is intended to price the unit out of the market at all but peak demand periods. OPG estimates that an emission adder of $7.50 per tonne wil suffice;
• OPG will match its coal purchases to the target emissions.

Interestingly, OPG's strategy does not mention co-firing coal with biomass. OPG is already piloting the use of biomass in each of its four coal-fired generating stations (see the media backgrounder issued in June 2008). Biomass is considered by many to be "carbon neutral", meaning the amount of carbon released when burned is equal to the amount removed from the atmosphere when being grown. Biomass could therefore be used to reduce the reportable emissions of the coal-fired facilities. That biomass co-firing was not included in OPG's strategy likely reflects OPG's reservations about the large-scale implementation of this emissions reduction option.

Ottawa's GHG offset system to include a "fast track" project approval system for first 6 months

submitted by Grant Boyle

On August 9 the federal government published a draft Guide for Protocol Developers for Canada’s Offset System for Greenhouse Gases. The draft Guide will undergo a 60 day consultation period before a final Guide is published. The Guide is intended to provide details on the requirements to complete an Offset System Quantification Protocol and the steps that must be followed to create offset credits under the federal GHG emissions framework.

Projects must take place in Canada, must have started on or after January 1, 2000, must be surplus to all legal requirements (federal, provincial/territorial and regional) and go beyond what is expected from the receipt of other climate change incentives (federal, provincial/territorial). Credits may be issued for reductions achieved after January 1, 2008.

The quantification requirements in the Guide are based on the ISO 14064 standard. The Guide does not provide or recommend an approach to quantify GHG reductions from specific project types and will rely on project proponents to develop and submit their own protocols to Environment Canada for approval, unless the protocol type has already been approved by the Ministry. The approvals process is expected to take 5-8 months.

During the first six months of the operation of the Offset System, Environment Canada will implement a modified and accelerated process to review and approve Offset System Quantification Protocols that are derived from a list of 40 “external protocols” from other systems, including: the Clean Development Mechanism, Alberta’s Specified Gas Emitters Regulation, the California Climate Action Registry, the Greenhouse Gas Abatement Scheme in New South Wales, France’s Offset System, and the Regional Greenhouse Gas Initiative. The Guide includes a proposed list of external protocols for “fast track” approval:

Agriculture
*Including Edible Oils in Cattle Feeding Regimes (Alberta)
*Reducing Days on Feed of Cattle (Alberta)
*Reducing the Slaughter Age of Cattle (Alberta)
*Anaerobic Decomposition of Agricultural Materials (Alberta)
*Livestock Project Reporting Protocol Capturing And Combusting Methane From *Manure Management Systems (California)
*GHG Emission Reductions From Manure Management Systems (CDM)
*Innovative Feeding Of Swine and Storing and Spreading of Swine Manure (Alberta)
*Tillage System Management (Alberta)

Energy Efficiency
*Waste Gas Or Waste Heat Or Waste Pressure Based Energy Systems (CDM)
*Residential Buildings (Alberta)
*Commercial Buildings(Alberta)
*Waste Heat Recovery Projects (Alberta)
*Waste Heat Recovery Project - Streamlined(Alberta)
*Energy Efficiency Projects (Alberta)

Forestry
*Afforestation Projects (Alberta)
*Forest Management (California)

Fossil Fuels
*Industrial Fuel Switching From Coal Or Petroleum Fuels To Natural Gas (CDM)
*Switching From Coal And/Or Petroleum Fuels To Natural Gas In Existing Power Plants For Electricity Generation (CDM)

Geological Sequestration
*Acid Gas Injection (Alberta)
*Enhanced Oil Recovery (Alberta)

Methane
*Landfill Gas Capture And Combustion (Alberta)
*Landfill Project Reporting Protocol Collecting And Combusting Methane From Landfills (California)
*Landfill Gas Project Activities (CDM)
*Coal Bed Methane, Coal Mine Methane And Ventilation Air Methane Capture And Use For Power (Electrical Or Motive) And Heat And/Or Destruction By Flaring Or Catalytic Oxidation (CDM)
*Aerobic Composting (Alberta)
*Aerobic Landfill Bioreactor Projects (Alberta)
*Coalmine Methane and Abandoned Mine Methane Capture and Destruction Projects (General Electric AES)
*Waste Water Treatment Methane Capture and Destruction Projects (General Electric AES)

Renewable Energy
*Biomass to Energy from Biomass Combustion Facilities (Alberta)
*Electricity Generation From Biomass Residues (CDM)
*Run Of River Power Generation (Alberta)
*Solar Power Generation (Alberta)
*Wind Power Generation (Alberta)
*Introduction Of A New Primary District Heating System (CDM)
*Grid Connected Electricity Generation From Renewable Sources (CDM)

Transportation
*For Gravel And Lightly Surfaced Road Re-Surfacing Projects (Alberta)
*For Freight Modal Shifting (Alberta)

Waste
*Recovery & Utilization Of Gas From Oil Wells That Would Otherwise Be Flared (CDM)
*Non-Incineration Thermal Waste Management (Alberta)

Other
*Biofuels Productions And Usage (Alberta)
*Catalytic Reductions Ofn2o Inside The Ammonia Burner Of Nitric Acid Plants (CDM)

BC Public Sector may purchase $24 million in offsets to be carbon neutral by 2010

Submitted by Grant Boyle

On June 26 B.C. released its Climate Action Plan, which outlines strategies that will help the province reach 73% of its goal of reducing GHGs 33% by 2020 from 2007 levels. The Plan outlines existing and upcoming policy initiatives that are intended to help reduce emissions from transportation, buildings, waste, agriculture, industry, energy and forestry in the province.

One of the legislated requirements highlighted under the Plan is for the province’s public sector to be carbon neutral by 2010. Under the BC Greenhouse Gas Reduction Act, all provincial ministries, health authorities, school districts, colleges, universities, Crown Corporations and other government agencies must be carbon neutral as early as 2010.

Public sector organizations must publically report emissions, reduce emissions and offset any remaining emissions. The government will set up the Pacific Carbon Trust as a new Crown Corporation to meet public sector demand for offsets. The 2008 Budget provides $24 million to invest in GHG-reduction projects. Although, the government has not indicated what type of offsets the Trust will accept, the Plan says that the initial mandate of the Trust is to offer “credible, low cost offsets” to the public sector. In light of Victoria’s indication that no regulations to implement BC’s Greenhouse Gas Reduction Cap and Trade Act will pass this year, the Pacific Carbon Trust’s mandate could drive the first compliance market for carbon offsets in the province, creating new opportunities for carbon reduction project developers.

The 2008 Budget also allocates around $100 million to support energy efficiency upgrades in public buildings and $15 million for communications tools that reduce the need to travel as measures to reduce emissions from the public sector.

BC launches Standard Offer Program for clean power projects between 0.05 and 10MW

Posted by Andrew Lord

BC continues to deliver on the BC Energy Plan: A Vision for Clean Energy Leadership. On April 11, BC Hydro launched a Standard Offer Program (the "BC SOP"). The BC SOP is intended to complement BC's traditional power tender process by giving smaller developers a streamlined way to sell power to BC Hydro.

The BC SOP sets out several eligibility requirements, including but not limited to the following:

• The project must be located in BC;
• It must have a nameplate capacity between 0.05 and 10 MW;
• The energy generated by the project must be clean, renewable or high efficiency co-generation;
• Only proven generation technologies are eligible (but nuclear is excluded). Proven generation technologies must meet specific criteria in the SOP Rules, particularly that the technology has been used in at least three plants, each for at least three years, to a standard of reliability generally required by Good Utility Practice (as defined in the Standard Form Electricity Purchase Agreement);
• All prescribed permits must be obtained before an application is submitted;
• The developer must have rights to use the proposed project site and that site must be appropriately zoned; and
• The project must also be able to interconnect to the grid. However, a formal interconnection study is not required until the project has been pre-screened by BC Hydro.

For developers, a key feature of the BC SOP is that BC Hydro will enter into a long term power purchase agreement. The proposed Standard Form Electricity Purchase Agreement gives developers the option of selecting a term of anywhere from 20 to 40 years (in whole years).

The pricing mechanism in the BC SOP is significantly different from that in Ontario's Standard Offer Program. In Ontario, the price per kilowatt hour depends on the type of generation technology used. For example, wind power fetches $0.11/kWh whereas photovoltaic power commands $0.42/kWh. Under BC's program, the price will not vary by generating technology. Instead, the price will be based on the following:

1. A base price that will depend on where in the province the power will be delivered to BC Hydro. The base prices listed in the SOP Rules currently range from $0.06994/kWh in Peace Region to $0.08423/kWh on Vancouver Island;


2. A CPI escalation of the base price up to the year when the Electricity Purchase Agreement is signed;


3. A time of day and month price adjustment. The adjustments currently range from a factor of 126% for Heavy Load Hours in February to 72% for Light Load Hours in July; and


4. The price of Environmental Attributes (if applicable). Currently, that price is set at $0.0310/kWh (to be CPI-adjusted) for any project that receives an Environmental Certification and delivers power to BC Hydro. The adjustment in point (3) will not be applied to the price of Environmental Attributes.

The price paid for Environmental Attributes reflects the fact that the Standard Form Electricity Purchase Agreement provides that the developer must assign all rights to Environmental Attributes to BC Hydro. This provision means that developers cannot sell the Environmental Attributes to other market players as part of voluntary carbon offsets, BC Emissions Reductions Units (under BC's proposed cap-and-trade law), renewable energy certificates (RECs), or other instruments that are based on Environmental Attributes. The provision may therefore limit a developer's flexibility in obtaining carbon financing for their project. However, the approval process under the BC Standard Offer Program provides developers with an opportunity to request changes to the Standard Form Electricity Purchase Agreement. Some developers may attempt to negotiate out of the Environmental Attributes assignment clause.

The SOP also provides for some cost-sharing. The developer is responsible for certain interconnection costs while BC Hydro will bear the costs of certain network upgrades.

For more information about the BC SOP, refer to the Standing Offer Program Rules and the Standard Form Electricity Purchase Agreement.